Wednesday, November 19, 2014

Ebook Publishing Gets More Difficult from Here - Here's How to Succeed

First the good news.

For indie (self-published) authors, there’s never been a better time to publish an ebook. Thanks to an ever-growing global market for your ebooks, your books are a couple clicks away from over one billion potential readers on smart phones, tablets and e-readers.

As a Smashwords author, you have access to tools, distribution and best practices knowledge to publish ebooks faster, smarter and less expensively than the large publishers can. In the world of ebooks, the playing field is tilted to the indie author’s advantage.

Now the bad news.

Everything gets more difficult from here. You face an uphill battle. With a couple exceptions – namely Scribd and Oyster – most major ebook retailers have suffered anemic or declining sales over the last 12-18 months.

The gravy train of exponential sales growth is over. Indies have hit a brick wall and are scrambling to make sense of it. In recent weeks, for example, I've heard a number of indie authors report that their sales at Amazon dropped significantly since July when Amazon launched Kindle Unlimited (I might write about Kindle Unlimited in a future blog post). Some authors are considering quitting. It’s heartbreaking to hear this, but I’m not surprised either. When authors hit hard times, sometimes the reasons to quit seem to outnumber the reasons to power on. Often these voices come from friends and family who admire our authorship but question the financial sensibility of it all.

The writer's life is not an easy one, especially when you're measuring your success in dollars. If you're relying on your earnings to put food on your family's table, a career as an indie author feels all the more precarious.

At times like this, it’s important for all writers to take a deep breath, find their grounding, remember why they became an author in the first place, and make important decisions about their future. It’s times like this that test an author.

Don’t fail the test.

Back in December, in my annual publishing predictions for 2014, I speculated that growth in the ebook market would stall out in 2014. I wrote that after a decade of exponential growth in ebooks with indies partying like it was 1999, growth was slowing.

I wrote that the hazard of fast-growing markets – the hazard of the rapid rise of ebooks – is that rapid growth can mask flaws in business models. It can cause players to misinterpret the reasons for their success, and the assumptions upon which they build and execute their publishing strategy. Who are these players? I’m talking about authors, publishers, retailers, distributors and service providers – all of us. It’s easy to succeed when everything’s growing like gangbusters. It’s when things slow down that your beliefs and underlying assumptions are tested.

I urged authors to embrace the coming shakeout rather than fear it. Let it spur you on to become a better, more competitive player in the months and years ahead. Players who survive shakeouts usually emerge stronger out the other end.

What’s causing the slowdown?

While every individual author’s results will differ from the aggregate, I think there are several drivers shaping the current environment.

1. There’s a glut of high-quality ebooks

There’s been a lot of hand-wringing by self-publishing naysayers who criticize the indie publishing movement for causing the release of a “tsunami of drek” (actually, they use a more profane word than “drek”) that makes it difficult for readers to find the good books. Yes, indie publishing is enabling a tsunami of poor-quality books, but critics who fixate on drek are blinded to the bigger picture. Drek quickly becomes invisible because readers ignore or reject it. The other, more important side of this story is that self-publishing is unleashing a tsunami of high-quality works. When you view drek in the broader context, you realize that drek is irrelevant. In fact, drek is yin to quality’s yang. You must have one to have the other. Self-publishing platforms like Smashwords have transferred editorial curation from publishers to readers, and in the process has enabled publication of a greater quantity and diversity of high-quality content then ever possible before.

The biggest threat to every indie or traditionally-published author is the glut of high-quality low-cost works. The quality and potency of your competition has increased dramatically thanks to self-publishing, and the competition will grow stiffer from this day forward.

Ten years ago, publishers artificially constrained book supply by publishing a limited number of new titles each year, and by agents and publishers rejecting nearly everything that came in through the slush pile. There was an artificial scarcity of books. The supply was further constrained by the inability of physical brick and mortar bookstores to stock every title. Even big box stores like Barnes & Noble and Borders could only stock a small fraction of the titles published by publishers each year, and as such they were forced to return slow-selling books to make room for new releases.

This rapid loss of shelf space for the poor sellers forced many high-quality books out of print before they had a chance to connect with readers. This then limited the supply of available books, which limited the competition for the authors whose publishers managed to keep their books in print and on store shelves.

We’ve moved from a world of artificial scarcity to organic abundance. Readers now enjoy a virtually unlimited selection of low-cost, high quality works, and these books will become ever-more plentiful and ever-more higher-quality in the years ahead thanks to self-publishing.

2. The rate of growth in the supply of ebooks is outstripping the growth in demand for ebooks

A few things are happening here. Ebooks are immortal, so they never go out of print. Like cobwebs constructed of stainless steel, they will forever occupy the virtual shelves of ebook retailers, forever discoverable. This is both good and bad. It’s good your book is immortal, because it means you can look forward to harvesting an annuity stream of income for many years to come, especially for great fiction because fiction is timeless. But it means that every year there will be more and more books for readers to choose from. Unless the number of readers and the number of books read by readers grows faster than the number of titles released and ever-present, there will be fewer eyeballs split across more books. This means the average number of book sales for each new release will decline over time unless readership dramatically increases, or unless we see an accelerating pace of transition from print reading to screen reading.

3. The rate of transition from print books to ebooks is slowing

The early adopters for ebooks have adopted. The exponential growth in ebook sales over the last six years was driven by a number of factors, most notably a rapid transition from print reading to ebook reading, and the success of ebook retailers such as Amazon, iBooks and Barnes & Noble. Today, ebooks probably account for between 30 to 35% of dollar sales for the US book market, with genre ebook fiction a bit higher and romance quite a bit higher. Since ebooks are priced lower than print, the 30-35% statistic understates the amount of reading that has moved to screens. Most likely (especially when you include free ebooks), screen reading in the ebook format today probably accounts for around half or more of all book words read. But the rate of transition from print to ebooks is slowing. We’ve reached a state that might best be described as a temporary equilibrium. I think reading will continue to transition to screens, but at a much slower rate of transition than during the last six years. The slower rate of growth will therefore limit the number of new eyeballs available for the ever-growing supply of ebooks.

How to Succeed in the Future Competitive Landscape

The easy days are behind you, but tremendous opportunities still lie ahead.

As I mentioned at the start of this post, there's never been a better time to be an indie author. Millions of readers are hungry to discover, purchase and read their next great book.

Here’s how to succeed in the new environment.

1. Take the long view

You’re running a marathon, not a sprint. Most bestsellers slogged away in obscurity for years before they broke out. Every bestselling author you admire faced moments where it seemed more sensible to quit than to power on. They powered on.

Work today to create the future you want 10 or 20 years from now. Six years into the ebook revolution, you’re still early in the game.

In any market, whether fast-growing or slow-growing, the early movers have the advantage. Although it was easier two years ago to grow readership than it is today, today it’s still dramatically easier to grow your readership than it will be two years from now.

Focus now on aggressive platform building. Build a social media platform - using tools such as Facebook, Twitter, a blog and a private mailing list - that you control. You 'll find platform-building is the most difficult when you're first
starting out. You'll also find as you grow your platform and your following,
it gets easier as your readers become your evangelists. Social media in all its forms rewards those who add value.

Authors who attract and capture the most readers today have the greatest opportunity to convert those fans to lifelong super fans. Super fans will buy everything you write and will evangelize your work through word of mouth, reviews and social media.

2. Good isn’t good enough

With the glut of high-quality books, good books aren’t good enough anymore. Cheap books aren't good enough (Smashwords publishes over 40,000 free ebooks). The books that reach the most readers are those that bring the reader to emotionally satisfying extremes. This holds true for all genre fiction and all non-fiction. If your readers aren’t giving you reviews averaging four or five star and using words in their reviews like, “wow,” “incredible” and “amazing,” then you’re probably not taking the reader to an emotionally satisfying extreme. Extreme joy and pleasure is a required reading experience if you want to turn readers into fans, and turn fans into super fans. Wow books turn readers into evangelists. Last year I wrote a post titled, Six Tips to Bring Your Book Back from the Doldrums. It's a self-assessment checklist that prompts you to take an honest look at your reviews, your cover image, your categorization and targeting. With some simple questions and honest answers, you'll be ready to give your books a makeover.

3. Write more, publish more and get better

The more you write and publish, the greater your chances of reaching readers. The more you write, the more opportunity you have to perfect your craft. What are you writing next? Get it on preorder now. Never stop writing. Never stop growing.

4. Diversify your distribution

There’s a global market for your English-language books. Smashwords can help you distribute to iBooks, Barnes & Noble, Scribd, Oyster, Kobo and public libraries. iBooks, for example, operates stores in 51 different countries and has become the world’s second largest seller of ebooks. Each of these 51 countries represents its own unique micro-market. If you’re not there with your entire list of books, then you’ll face long term disadvantage against the majority of Smashwords authors who’ve been building their fan bases for the last few years with uninterrupted global distribution.

If you don’t have all your books available at every retailer, you’ll undermine your long term potential.

At every writers conference I attend, I’m surprised by the number of indie authors who ask, “How do I decide between Amazon and Smashwords?” The question belies an unfortunate truth about the state of indie publishing – a scary large number of authors publishing at Amazon think Amazon requires exclusivity. Not true! Yes, they'll poke and prod you to go exclusive, but you can say no. I recently wrote a short post for the IBPA (International Book Publishers Association) on this subject titled, Exclusive is Actually Optional at Amazon. Do your indie author friends a favor and help them understand the benefits of global distribution.

5. Network with fellow indies

As I wrote in the Indie Author Manifesto, indie does not mean “alone.” It takes a village to publish a professional-quality book. Network with your fellow indies at writers conferences and local writers groups. Share experiences and support one another through the good times and bad.

6. Publish multi-author box set collaborations

When authors publish and promote multi-author box sets, they can amplify their fan-building by cross-marketing to each participating author’s fan base. Box sets work best when every author pitches in on the promotion. Check out my recent blog post on how to do multi-author box sets. Partner with authors you love, and who you think your readers will love. Be a great partner!

7. Leverage professional publishing tools

Over the last couple years at Smashwords, we’ve introduced a number of new tools that give our authors a competitive advantage in the marketplace, such as Smashwords Series Manager for enhanced series discovery, and preorder distribution to iBooks, Barnes and Noble and Kobo. Yet despite the availability of these tools, they’re not universally adopted. Even though we’ve proven and communicated that books born as preorders sell more units that other books, only a minority of Smashwords authors release their books as preorders. Take advantage of these tools. They give you a competitive advantage!

8. Best practices bring incremental advantage

There’s no single magic bullet that will make your writing career take off. The secret is that you must do many things right and avoid mistakes that will undermine your career. The many things you must do fall under the umbrella of best practices.

As I wrote in The Secrets to Ebook Publishing Success in my discussion of Viral Catalysts, it's helpful to think of your book as an amorphous blob, and attached to it are dozens of dials, levels and knobs that you can twist, turn and tweak to make your book more available, more discoverable and more desirable. What are these things you can tweak and adjust? I'm talking about your editing, your cover, your book description, pricing, categorization, etc. Once you get the combination of settings just write, your book will start selling.

Best practices are what separate the indie author professionals from the indie author wannabees. Be the pro! Even if you're already a bestseller, challenge yourself to do better. Find those things you're not doing that you should be doing better.

So here’s some good news for you. Although the indie author community is more professional and sophisticated than it was five years ago, the fact remains that most indie authors don’t fully exploit the power of best practices. There's plenty of low-hanging fruit on the best practices tree that they're ignoring. This means if you fully exploit best practices, you’ll have a significant advantage over the majority of authors who do not.

Here's a quick summary of some of the most commonly underutilized best practices: 1. Many indies release their books without professional editing and proofreading. 2. A surprising number of authors end their book with a period and that’s it, and not with enhanced back matter and navigation that drives sales of your other books and drives the growth of your social media platforms. 3. Although indie authors are releasing books with better quality covers than ever before, a surprising number of authors still release books with low-quality homemade covers. 4. A lot of series writers haven’t yet experimented with free series starters, even though free series starters are proven to drive more readers into series and yield higher overall series earnings. 5. Many series writers don't yet link their series books in Smashwords Series Manager, even though this tool increases the discoverability of series books at Smashwords and at Smashwords retailers. 6. Even though we’ve published strong evidence three years in a row in our Smashwords Surveys (2014, 2013, 2012) that longer ebooks sell better than shorter ebooks, some authors still divide full length books into shorter books that can disappoint readers. 7. Sloppy descriptions. You'd be surprised at the number of book descriptions that have typographic errors, or improper casing or punctuation. Readers pick up on this stuff. Mistakes like this are like a slap in the face of your prospective reader.

To long time readers of the Smashwords blog, you're probably already familiar with many of the proven best practices I mentioned above.

Indie authors pioneered many of these best practices. I learn from you and your fellow authors, and share what I learn.

9. You’re running a business

Mark’s Unconventional (but proven effective) Rules for Business: 1. Be a nice person. Treat partners, fellow authors and
readers with kindness, respect and integrity. You'll find as you develop your career, the publishing industry will feel smaller and smaller as you get to know everyone, and as everyone gets to know you. It takes a village to reach
readers. All these people - fellow authors, critique partners, beta readers, editors,
publishers, cover designers, literary agents, publicists, retailers, and distributors - have the power to open doors for you. 2.
Be honest. Business relationships are built on trust and honesty. The fastest way to destroy a relationship is to be dishonest. 3.
Be Ethical. Don't cheat. Do unto others as you’d want done unto you. 4. Be Humble.
Yeah, I’ve told you have superawesome potential within you. But know that you can always be better. Celebrate those who
help you succeed. Always know that none of us can achieve anything
without the support, encouragement and love of those around us. It
takes a village.

Practice expense control. Your sales will always be uncertain, but your expenses can be controlled. Jealously guard your pennies. If you can’t afford professional editing, for example, find another way to obtain it. A couple months ago at the Rocky Mountain Fiction Writers conference, I gave a presentation on best practices. To underscore my suggestion that writers find another way to get professional editing if they can’t afford it, I pointed out an editor friend in the audience and suggested that if authors couldn’t afford to pay for her services consider offering her something of value in exchange. Tongue in cheek, I said, “if you’re a professional masseuse, offer massage services.” To my surprise, I learned afterward that two professional masseuses in the audience handed the editor their business cards at the end of the presentation. You've got skills. Get creative. Trade editing with fellow authors. Trade services in exchange for professional cover design.

11. Time Management

Do you have too many hours in the day? Of course not. Organize your time so you’re spending more time writing and imagining, and less time with the menial grunt work. Smashwords can help on the distribution side. Consolidate your distribution to reap the time-saving benefits of centralized publishing control and metadata management.

12. Take risks, experiment, and fail often

Success is impossible without failure. Failure is a gift. The challenge is to take a lot of little risks and make every failure a teachable moment.

13. Dream big dreams

Be
ambitious. Aim high. You’re smart and you’re capable. You must
believe this. Because if you don’t try, you can’t achieve. Salvador
Dali said: "Intelligence without ambition is a bird without wings."

14. Be delusional

At the Pikes Peak writers conference three years ago, I had a fun conversation with uber-agent Donald Maas. Don had just told a room full of writers that self-publishing was a fine option if they didn't want to sell any books. Later that night, we crossed paths at dinner. I told him I thought he was underestimating the impact self-published authors would have on the publishing industry. He told me he thought I was delusional. When someone doubts me, I feel energized. To have vision - to see what doesn't yet exist - that's delusional. Be delusional. What's your vision? Know that every NY Times bestseller was absolutely nuts to write a book. Most books fail, so common sense would advise getting a job at McDonalds instead. Three months ago, three years after my conversation with Mr. Maas, Inc. Magazine named Smashwords to its INC 500 list of America’s fastest-growing companies in recognition of indie authors at Smashwords who sold over $30 million worth of books at retail last year. Who’s delusional now?

15. Embrace your doubters

They know not of what they speak. They’re delusional too. They can't yet see what you see. They can't see what' s in your imagination. Give ‘em a hug.

16. Celebrate your fellow authors’ success

Your fellow authors' success is your success, and yours theirs. When you achieve success, do everything you can to pause a moment and lift up your fellow authors to join you. A journey shared is more satisfying than a journey alone.

17. Past success is no guarantee of future success

I think about this a lot at Smashwords. The world is cyclical. You’ll have ups and downs. When you’re having a great run, enjoy it, soak it in, bank it, pay off debts and build your savings for a rainy day. The rainy day will come. And then keep working. Never stop sprinting as fast as you can in the direction of your dreams.

18. Never Quit

Never give up. Quitting guarantees failure. If you never quit, you’ll never fail. Stamina and staying power beat the sprint. Think of the story of the tortoise and the hare. Fight for your right to pursue the best career in the universe.

19. Own Your Future

In the past, you were dependent upon publishers. Now it’s all you. Your success or failure is your own. You’re the writer and the publisher. You decide how you publish. You choose your partners. If you succeed or fail, it’s on you. Avoid finger pointing and celebrate those who help you succeed.

20. Know that your writing is important

Books are important to the future of mankind. You are the creator of books. That makes you special, and it also burdens you with a special responsibility. No one else can create what you have within you. Your writing represents the manifestation of your life, your dreams, your soul and your talent. You’re special. Others might think you’re suffering from delusions of grandiosity but so what? What do they know? If you don’t believe in yourself, who will?

Find success and satisfaction in the journey of publishing. Know that the measure of your importance and the measure of your contribution to book culture and humanity cannot be measured by your sales alone. The moment you reach your first reader, you’ve done your part to change the world. And that’s just the beginning.

If you publish for the right reasons and you adopt best practices that
make your books more available and more desirable to readers, your
future is as bright as your imagination.

56 comments:

Great ideas and many thanks for showing a concern for writers that reaches far beyond Smashword's bottom line.

I'll add some suggestions for those who must work to subsidize their writing. Look for work that meshes well with your writing.When I lived in increasingly expensive Seattle, I needed quite a bit of part-time work to subsidize my writing. Here's some things I learned.

1. I'm too tired to write from late afternoon on anyway, so turned that into money-making time. I worked for a temp agency doing security at pricey venues. I didn't like not having every evening free or working from 6 pm until after midnight, but that took no time away from writing. I woke up the next morning free to return to my writing.

2. Balance your writing with something emotionally and mentally different. Writing all alone can be tiring. Dealing with crowds can also get tiring. But the two are tiring in different ways. Writing in my little 1920s-era apartment made we want to mix it up with people. Dealing with crowds made me happy to have time alone with my thoughts. Between the two my life was about right.

In short, experiment with various sources of income to find what works best for you.

Writing is by nature a appeal-type relationship, but that appeal needn't be based on trends or contentions. But I've been a long-time reader of writing magazines and found that success is based on being self-relevant, instilled and ultimately, self-devoted. You have to not only believe in your work but be an idealist about your talent that you see it to its fruition and fortune. That seems to be the main-accent to proving your greatest success over time...

I felt the change in the ebook market around two years ago, as you mentioned Mark. In recent months I have been reviewing my ebook strategies from here on, so your advice comes at an opportune time.

But you are right. Those of us who have been around for a while have a huge advantage, as we have had years to build a solid platform. Especially as you say, in social media. But I have been very lazy when it comes to mailing lists, so thanks for reminding me to do something about this.

Great post, and as always, I appreciate your frank, open and honest thoughts on self-publishing. A rarity!

Great advice. Thank you! I'm finding that the market changes and shifts so quickly, I have to consistently re-evaluate my business plan. What used to be a 5 year plan is now more of a year to year plan, or maybe two years out. Building a stronger platform and my emailing list are two big ones for me as well as releasing the best books I can at a reasonable time schedule.

Great post. I believe hard work and dedication to the craft is a lifelong journey. It is a tricky publishing world we live in, and there will never be a guarantee for most of us when it comes to steady income, but ultimately, a writer writes because it is who they are, and what they must do. If that's the case, then doing the best possible work one can put out for consumption is the reward itself. But we all want that brass ring too. :)

Great stuff as usual, Mark. I'd like to see a graph that shows the number of new titles since 2007 matched with the number of active readers and the amount of books those readers read per year. Seems logical that supply has grossly outpaced demand, although I hope readers are also reading more than in the past.

Good rundown, but let's face it - many authors don't have what it takes. They write when they feel like it, they spend forever on editing, and marketing just isn't something they want to do.

Perhaps the Great Flood of 2014 might be a more apt title, for I feel a lot of the 'drek' you talk about will be washed off the landscape soon. Oh, it'll still be there, just sunk down below any rankings that mean anything.

I hope a lot of people give up, but you know, I don't think I need to hope at all - like you said, they're doing it. Good. Weed out the weaklings. Maybe a lot will head off to the classroom to teach writing. Even better for those of us not quitting.

As a small traditional publisher (www.ashberrylane.com), I love the reach that Smashwords gives us with time-saving centrality. But more than that, I love your focus in this article about the morality we aspire to in this industry and keeping our focus on why we do what we do.

There's also some kind of insane pride I get from mastering the MeatGrinder. ;)

With the CBA fiction lines getting smaller and smaller or disappearing entirely at certain houses, I'm predicting the rise of the small press. In fact, I'm on Novel Rocket discussing that very thing today! http://www.novelrocket.com/2014/11/the-small-press-option-interview-with.html

Great post Mark. I agree with Greg: self-publishing was awesome for awhile because there weren't as many books - so indie authors could price aggressively, hit bestseller lists and do pretty well for themselves. It's not that easy anymore. Now you need a great book, a well-designed product, and at least a big enough platform or marketing savvy to hit the top of your genre or category. It's not that difficult - if you know what you're doing - but you can no longer get their by luck or accident. For me, this is all pretty exciting news, because it means the authors who publish as a business and take the time to set things up right are very likely to be rewarded.

1) Getting all our names linked as individuals so they come up on the remote distributors (which my understanding is you're working on this);

2) Back-matter. All of our box sets for our direct-upload distributors (Amazon, GooglePlay, Kobo, e-Sentral, etc) have LINKS to all those next books in the 'Other Books by...' section. However, if we distribute through Smashwords, the pro-collaboratives are unable to do that.

Our sales at Amazon of our last $.99 cent bargain box set were over 10K, direct to Kobo a respectable 1K, and G-Play (where we uploaded late to the game) even there we had a respectable 'echo' of other books, but on Smashwords sub-vendors ... nothing. No downloads when we weren't pushing sales. No ranking on the vendors. No visibility. And we dumped at least $1,000 in ads, some of them direct to iTunes and Nook.

The whole point of a bargain box set is to hook new readers to your next works, and with everybody reading Mobile these days, they need to be able to click that 'next book' link and be at the vendors page.

Is there any plan in the works to allow pros to upload vendor-specific editions of their books? I.e., B&N Edition, iBooks Edition, Kobo Edition, etc. The case of staying with Smashwords for the sub-vendors vs. coughing up for Mac or dealing with Nook Press wonkiness gets weaker when you start to build a backlist because of this inability to link to your own books on the varying platforms.

Really ... it's much nicer to deal with a single distributor rather than chase 50 small ones ... but not if it means we never see any 'echo' on our next-book blurb and backlist.

I believe there is a technical component to the slowdown in eBook conversions. Current eBook reading devices work well for reading fiction and that is reflected in the high percentage of fiction eBook sales. However, current devices do not support non-fiction as well as they support straight through linear reading of fiction. The devices we have now don't support flipping around nearly as well as paper, and non-fiction often involves re-reading. The graphics are often too small and indistinct. For how-to-books, eBooks don't fit in on kitchen counters and workbenches.Nevertheless, these are all solvable technical problems that will eventually diminish and conversion will continue to rise. When will these issues be solved? That's crystal ball work, but technical problems tend to be solved quickly when there is a market for the solution.

I love what Danny Allen said in the comments: "You have to not only believe in your work but be an idealist about your talent that you see it to its fruition and fortune."

Right on. Yeah, I'm not quitting. My earnings have stayed steady (actually improved some!) at Smashwords over the last three years. At Amazon, it fluctuates, but stays within the same ballpark at least.

I've yet to have a "breakout book" but perhaps that will happen in the future, as I plow on!

It's been quite a journey for me, anyway, one that I've never been sorry I started. I think my problem, often, is that I don't "think big" enough.

I was riding a high off the greatest ebook launch of my career today, then I read this and came back to reality.

I agree wholeheartedly with the post. Yes. It is tough. It doesn't seem tougher to me now, however, than five years ago. I'm seeing a pretty solid leveling out where I can rely on a consistent income every month.

My second to last title was a flop and it means belt tightening when I get that month's royalties. However the title before that was a huge success for me, and that came out in August. I can't say I'm seeing a larger trend affecting me personally, or maybe I'm just not able to connect the dots.

I've managed to live solely off my fiction for the last ten years in one way or another. Every year, year after year, I've had to switch what I'm doing and try something different in order to maintain my income.

It's insane! You have to be crazy to put up with such uncertainty--but my friend reminds me: If I wasn't doing this I could be working at KMart (if I'm lucky).

I love your blog posts, Mark. You embrace what we do without prejudice and actually set up a platform that puts dollars in my pocket.

I'd like to add to the post to say one of the great ways to diversify this year is to set up a complimentary blog to your writing. That's the tactic I'm using this year to boost my presence. I put a dedicated domain on Tumblr, essentially using Tumblr as a web host, but with the benefit of having every Tumblr user who visits my blog being able to reblog me via Tumblr, and find me on Tumblr through my tags. (Tumblr is for my gay romance genre the Facebook of blogs). I monetized this blog and promote my work with every riveting blog installment. I've had a few posts go viral (thanks to using the Tumblr engine) and that seriously helped boost sales of my writing. I've also made $35 in advertising so far this month. Woohoo?

It's survival of the fittest. I'm not the best writer out there, but I'm damned nimble!!

There is an important topic that's missed. Another highly important point for the slowdown needs to be brought into the light.

One of the reasons the economic index looks like it's improving, especially when it's really getting worse, is the government is adjusting the formula. It's during an election cycle, and the 'economy' always looks 'better' during an election cycle, just as much as gas prices goes down for the same event.

This isn't tin-foil hat stuff folks. The US Economy is seriously damaged. In order for us to get back to pre-recession job levels, around 22 million Americans will have to be rehired in full time jobs that pay a little better than the current median income.

Welfare rolls have more than doubled, with more than 40 Million Americans depending on the government just to put food on the table. Leave along the 1% of scammers looking to rob the welfare system, as there is still that 99% of honest people who would rather have a job than go stand in a benefits line.

When people have less to spend, and even less to pay for necessary items, like medicines and utility bills, they cut back on their spending. Big time. Because your ebook is only .99 cents, doesn't mean it's going to get bought.

If you want to know why your 'free' ebooks download at a much higher rate, it's not because those readers are looking for a steal. These are people who were readers since middle school and all the way through college, and don't have a job anymore.

I have a friend with a master's degree working for Molly Maids and making minimum wage. He's ticked off. His favorite quote? "Whoever said that having a higher education means you'll have a better paying job has lied!"

Every year, new graduates are popping out into a job market that's under water. A percentage of those are also readers.

These people grab the freebie downloads, because forking out even a buck for another title from an author they are loving means another Ramen Noodle Meal lost. For millions of Americans, that's the honest, real deal.

Just because it may not be a reality for you, or your friends, doesn't mean it isn't a reality for 1/3 of our country.

Want to see those sales go up? We need those jobs to come back. If and when 30 to 40 million workers get rehired, I promise the good days will come back. Not before.

This industry runs on the energy of the authors. Obviously one exhorts them to come out with better, not 'more', as suggested here. Also learn respecting the books that have sales and are priced higher than $0.99. They have substance. Promote them to promote your sales. Some companies are actually obfuscating the real sales of such books to promote the books they have charged money to promote. If Idie too went the way of Syndie, this industry too will sink. Kick those business consultants out of your payroll, who come in the way of a good writing. It alone will survive everything.

Great comments, everyone, and thank you for adding your additional perspectives.

@Anna: 1. We can do this. It's not yet a self-serve capability but you can contact our support team with the author profile pages of the authors to be linked. 2. Yes, under much consideration. Great ideas. I want to get there with custom links!

@D.A. Roberts. Yes, the "strong" economic numbers mask a sad truth that the US economy is not terribly healthy. News out this week that child homelessness has hit an all time high in the US. More people are working, but working harder for less pay. I could go on but I won't. Yes, a healthier economy would help the US, though there's economic weakness around much of the world right now. The strong dollar is also probably blunting indie authors' foreign sales a bit. The silver lining, if there is one, is that indie ebooks are much more affordably priced than traditionally published ebooks which enables cash-strapped consumers to stretch their purchasing power. It's easy to let these negative things drag you down. Keep the eye on the prize - consumers are still buying billions of dollars worth of books.

Great blog, and so well-timed, too. I treat my writing as a business, while enjoying it as well, even the times it becomes frustrating. I still work an outside job as well, but my writing is my second job. One day I hope it'll be my main job. Meanwhile, blogs like this and reading everyone's comments helps keep me inspired - thank you to everyone.

Great post, Mark. You mention the 40,000 or so free books, and one thing I've been wondering is how typical sell-through rates vary between free books and paid offerings. Is there any chance of including data on that on the next annual survey? I feel it's a vital missing piece of the jigsaw when it comes to deciding how to price books.

A lot of authors seem to be reporting a drop in the effectiveness of free lately. Some of that has to be the increased numbers of books. I also think changes at Amazon make free titles less visible and a harder sell in general. Interesting times.

My youngest daughter works for a hedge fund in Denver. She's never read my books, but has a friend who became a big fan after my daughter passed on the paperback copies of the first six books that I had given her.

A couple of days ago my daughter asked if she could bring the friend to dinner next week when I'm in Denver and said promises were made to not go "fan girl". The friend was very excited that my series book #8 is coming out soon. I asked my daughter how the friend liked #7. It turned out she had missed #7.

(At this point I must mention that this particular friend of my daughter's is mega-rich.) This morning, chatting by email, I asked my daughter if the friend had gotten a copy of #7. She said, "Oh yes! She found it on a site that was offering it for free!"

I may have stopped breathing for just a minute. As you can surmise, this friend of my daughter had no concept that she was doing anything that might hurt me or the book industry in general. She thought she had simply stumbled on to some kind of "special" deal. Knowing that this reader could have paid $1,000 for my book and not missed it at all just seems to make it worse.

Very disheartened. I think piracy is a bigger part of the problem here than people want to talk about because everyone feels powerless.

I've spent many hours mulling over possible solutions to the piracy thing. My petition push fell flat. Now I have another idea.

One day when I was on one of the sites that was offering all my books for free, the rotating banner happened to catch my eye. JOHN DEERE TRACTOR. That's when I realized that could be part of the answer.

The pirate's motivation for putting up sites with free books is the revenue that get from hosting Google Ads. Does Google want to help police this? Absolutely not. Why would they? It's a huge earner for them. I've contacted them many times about various sites. I get a canned email about how much mail they get and that's the end of it.

However, if ENOUGH authors posted a daily list of companies that knowingly or unknowingly participate by having their ads showing on sites offering stolen goods? Their PR departments might start asking Google some questions about vetting the sites where their advertising is displayed.

What do you think? Do authors care enough about having someone reach into our pockets or purses daily and steal to put up a list of some of the corporations that are indirectly driving piracy?

Kind Mark, I have always admired your passion for building a unique community for Indie-Authors. You are quite right.

This is a Marathon not a sprint, and only a Few number of us shall succeed. Luckily, I never stop selling, maybe because I have been publishing a large number of books, maybe because I realized two years ago that this business is like agriculture, you need to wait till the seed grows up.

But don't you think that FREE eBooks are the principal negative cause that makes sales drop down?. I have noticed that whenever I promote a book for FREE the more downloads I get.Keep up the sacred flame as always!

Mark always does an exceptional job of encapsulating the past, present, and future of publishing. Although the future may seem bleak for most of us in indie publishing, the one point I want to echo and drive home is that those who hang tough and keep producing the best works possible will survive and thrive.Part-time writers (aka Weekend Warriors) and those who believe the open publishing market is chock full of homeruns and overnight success stories will be the first wave to leave publishing, bored and disillusioned, over the next two years. Others, too, will come and go, but we'll see a diminishing glut as truths supersede rumors, dissuading many to play in our sandbox.I haven't met one recording artist, pro athlete, writer, corporate CEO, etc that was an overnight success. To get to the top (or near top), they continued to refine their craft, increase their exposure, and persevere.Simply, what the publishing world is experiencing is the same lifecycle experienced in every other market, product, and service.During the bleak times, when you're not writing, you should hone your craft through continuing education. I highly recommend that if you chose to make a career out of writing, then you should take at least one introductory course in economics and another in basic business principles. After all, career writers are long-term business professionals, whether you want to admit it or not. Can't put on blinders and succeed – that strategy doesn't work.What writers, pro athletes, and companies have in common is that practically everything follows the same or similar lifecycle. For brevity sake, I won't go into proving this. But, once armed with a basic understanding of the factors that drive markets and influence buying & selling decisions, then you'll sleep better at night and won't worry so much about book sales. Focusing on those factors you, alone, can control will help you navigate your career through the rough and rocky waters of publishing.Open Culture (www.openculture.com) is one source that offers links to a bunch of FREE courses taught by Ivy League (among others) professors on the subjects of economics (http://www.openculture.com/economics_free_courses) and business (http://www.openculture.com/business_free_courses). Any intro course on microeconomics and basic business principles will be enough to help.Hang tough, folks, or get out of my way. 

@Ros, in the 2014 Smashwords Survey, we found free ebooks earned 39 times more downloads than a book at any price. A year earlier, the multiplier was around 91, so this means that although free is a great catalyst for building readership, it has lost some of its mojo. We've been encouraging everyone for six years to take advantage of free, and in the last two years I think a lot of authors have gone there. Free is catnip for a series starter, and authors who have free series starters are more likely to land on the bestseller lists. Free promos are also a great way to drive preorders for follow-on books.

@Victoria, stories like that are punch in the gut for writers. It's difficult to measure the level of harm this is causing, but stories such as your own really drive home the need to educate readers how piracy is no different than shoplifting, only in the case of indie ebooks, they're stealing from the hands of the writers and their families. I checked your books and see you're using our recommended Smashwords License Statement, so that's good. For folks who don't use the license statement, please take a look at the Style Guide. The statement offers the reader a polite but firm reminder of their moral and ethical obligation to pay for the book their reading. Separately, I think there's room for shame campaigns as Victoria suggested against those who profit from illegal downloads, and probably more reader education on author blogs and social media. When authors speak out against it, they need to carefully calibrate their tone. Emphasize the harm it causes indies, how it makes it difficult for authors to continue producing books, and avoid the rant. Although the rant feels justified and cathartic, some readers will take it the wrong way. If your readers who love you understand the hurt rather than angry, they'll be more sympathetic.

@ Elisio, just as there's no single magic bullet secret to bestsellerdom, I don't think there's a single principal cause of competitive pressure for indies. Everything is a contributing factor. In the case of free, we know it drives readership and greater earnings for series authors. We know it makes it easier for authors to build readership because it makes it easier for readers to take a chance on an unknown author. But certainly, I'm sure there's a segment of the reading audience who never purchases anything, and therefore free becomes an enabler. Another factor I neglected to mention above is that authors are competing reader attention against non-book media alternatives, many of which are also free. So as a best practice, I think every author should experiment with free and then make their own decision about how to best utilize it.

LC, great comment, and particularly your advice about authors seeking business training. As a business school graduate myself (UC Berkeley '88!), I totally agree. Once you understand business and economics, it completely changes your perspective on things. It helps you make smarter decisions based on the evidence you're observing. It helps an author better understand the long term competitive implications of their own actions, or the actions of retailers. Suddenly you see what others can't.

Nice things, Mark, but I find that distribution to only 8 retailers does not cut it anymore. And, your style guide is somewhat out of date. In order to produce an ebook in the EPUB format it takes quite a bit more than just uploading a DOC file and hope the conversion goes through. I have moved over to another distributor and their EPUB format requires a clean, stripped out HTML file with no Office markers or Word markers. What I produce for my EPUBs is exactly like my printed books, and I am able to render images better, too. Then I convert myself and upload the EPUBS with my own ISBN.

It would appear that, no matter how hard I tried to make the files readable on Smashwords there was always some glitch, and I realized I was not reaching enough of a market to make the effort of following your style guide tenable. Sales were slow to non-existent. As well as finding that your advice about publishing Smashwords links may have killed it for me. Retailers do not want such "extras" attached because it robs them of other sales.

As for Amazon, I knew that there was no exclusivity; I read the instruction manual. However, authors not signing up with KDP Select (the lending program) are subject to disappearing down a black hole. Amazon wants authors to believe that giving it exclusivity through KDP Select will garner them some improvement in sales. But when I declined to participate, it was because I read authors complaining of sudden dropoffs way before their 90 days were up, and I did not like that idea of giving Amazon a distinct advantage in the marketplace. There was no guarantee that KDP Select would do anything to increase sales, it was just a ploy to keep customers happy with getting to read books for free. So your advice about continuing to work with Amazon just because it happens to be the biggest retailer (and I don't see any real proof of that)is not something I would take.

As for improving the quality of the books, I am on board with that but telling people there is a better chance of selling them does not look possible as long as there are free books offered by people who don't understand what that does to the whole market. The decline in sales of ebooks has largely to do with the return of dissatisfied customers to the book stores, which will always be there. They are not happy with DRM requirements, shifting allegiances among retailers and mergers and acquisitions by (among others) Amazon, who is just trying to eliminate the competition; and there is the danger that the ebook they "bought" will just be removed at random and without a good reason. Even if there is a chance the book will sell well, word of mouth is not enough to really make the title catch on. So relying on any one retailer so heavily is a gamble at best and a waste of time and energy at worst. I would rather distribute as widely as possible. So I am still at Smashwords, but only to reach Smashwords customers.

Thanks so much for sharing this comprehensive and awesome post. Too often I work with fellow Indie authors who think that they need to give up because they didn't sellout the second they came out the gate (I'll admit that I had thought publishers would come running the second I wrote THE END).

Writing is about creative expression and should be a passion for those who are writers. But if you want to sell books, you've got to think like a small business, and too often I think authors forget that. I know I have.

Apple has an impressive 51 stores globally but if we publish to Apple through Smashwords we can only set the Us price. All local prices are based on that. If we go direct we can set the price country by country. Can Smashwords address this?

Google Play has 60 global stores, and plenty more on the way. When will Smashwords get indies into Google Play?

It's great that Smashwords gets us into Flipkart in india, but India has many other ebook stores. Not least Newshunt and Rockstnd which are growing very fast. Does Smashwords have any plans to expand its reach in India?

Globally other aggregators get our ebooks into the OverDrive retail catalogue, the emagazine distributor Magzter, the SE Asia group eSentral and global distributors like Epub Direct, Gardners, Copia and Ingram.

There are huge opportunities for global expansion, especially in places like China and Indonesia, but Smashwords is still barely reaching out beyond the US/UK axis.

Mark, I absolutely love your Rules for Business.I published my first book 17 months ago and reached the level of a few hundreds bucks and a few hundreds of readers a month.The Rules apply at the bottom of chain as well as at the top, where you sit ;)

@ebookbargains, yes, more channels coming in the months ahead, and yes, we will develop tools to give authors/publishers more multi-currency pricing control.

@david based on actual sales data I'm seeing from every retailer we reach. Sample size ranges from ~200 titles at Amazon to 200,000+ at iBooks, B&N, Kobo, Oyster, Scribd and others. Difficult to read too much into Amazon. The drop we see at Amazon is probably reflective of what non-KDP Select authors are seeing post KU, since none of our books are in KDPS/KU.

Thanks, Mark. I published my first book less than a year ago. I've read a lot of your advice and have always found it helpful. I'm six books into my career now, and in it for the long haul. I honestly think I would have given up by now if I hadn't started following your advice about eight months ago. Thank you again, and keep it up!

Sales growth has slowed but sales figures are still good. The dilemma is that the pace at which books are being written and distributed is far greater than the growth of the reader base driven by distribution channels.

Without having actual numbers to back this up except on my own sales stats this is the only logical explanation.

What has worked for me and other Speedy authors is revamping the entire book creation process.

Example: First we look at Google Trends to track to see when a niche is most popular (say beer brewing or cop romance).

If these topics are searched for online mainly during December - we time the release for June and make our book FREE for the off months to improve rankings in the Search results with online retailers and get those needed reviews.

During that time we double down on distribution formats - we do this by producingA.) eBook (EPUB, MOBI & Web PDF)B.) Enhanced eBook, adding an audio or videoC.) Create the Print Version (Typically 6 x 9)D.) Create the Large Print version of the book - very easyE.) Create the Audio Version - we use ACX.ComF.) Use Andromo.Com to create the Android Mobile App Version* Sometimes we go for refreshable Braille - we are making a bet on that for the future.

Once we have all the formats we blast them out to as many distribution channels as we can - ALL free during the off periods.

1 - 2 Weeks before the on period we then set the prices at 99 cents to keep the momentum and then we tweak the price when we feel like.

For Non-Fiction books you want to refresh your covers and copy - say something like "New for 2015"

Or say things like What to Read After Mocking Jay.

The days of not treating your book as a living breathing animal is long gone.

It's great to have a balance to match the megalithic Amazon whose success is driven by their own desires for domination.

Undoubtedly its possible to work with Amazon, but partnering too, for the long term with Smashwords offers some real understanding about what it means to be an (indie) author. Perhaps it's time for me to try it too!

It's in your approach in being a ebook author that will allow you to last... Being inspired is knowing yourself and aligning all that energy, incentive and passion and aim it at a full-crux and fulcrum. Human knowledge has a way of both suiting the author and the reader, and that potential empowerment shall forever grant appreciated and due devotion.

thanks for these updates, Mark Cokerplease keep them comingthey inspireI have added license notes and end matter to my upcoming book, Abominable Snowmanmy negligent, imaginary business manager has been on a huge bender, I guess--

Thanks for sharing this article, really interesting to gain insight into the ebook industry. I had presumed it would only be on the up, with more and more e-reader/ tablet purchases, but good to see this perspective too. Cheers.

Mark --- an excellent article. I appreciate the transparency from someone as innovative and successful as yourself.

I am writing to provide a little different perspective on a couple of your points.

#1 - regarding the "glut of high quality books" you said "Ten years ago, publishers artificially constrained book supply by publishing a limited number of new titles each year, and by agents and publishers rejecting nearly everything that came in through the slush pile. There was an artificial scarcity of books. The supply was further constrained by the inability of physical brick and mortar bookstores to stock every title. Even big box stores like Barnes & Noble and Borders could only stock a small fraction of the titles published by publishers each year, and as such they were forced to return slow-selling books to make room for new releases."

In the past, the model was established to generate sufficient revenue and profit for each title so as to build sustainable publishing companies and retailers and authors. There was relative economic balance and stability in the system - albeit an exclusive one. Due to the Creative Destruction of eBooks and e-Publishing platforms, there is now a glut of options in the marketplace. This has led to downward pressure on prices and author incomes. This is not sustainable. The natural economic response to this is for many people to give up on this as an income stream, leaving it to those who are willing to tough it out and hopefully consolidate the remains. Dare I say the period we are about to enter is one of disillusionment (for many)that follows any "gold rush" or fad.

#2 -- you said "Ebooks are immortal, so they never go out of print. Like cobwebs constructed of stainless steel, they will forever occupy the virtual shelves of ebook retailers, forever discoverable."

On one hand, this is not much different than a library filling its shelves with thousands of books no one checks out anymore. The unwanted books are not searched for or discovered -- they are just ignored. For this reason, it is actually more likely online retailers will NOT keep a never-ending list of backlist titles. Rather, it will make more sense for retailers to cull their offerings and drop the stuff that is not collecting any interest. Additionally, let's assume ebook platforms change a few more times and the technology requires conversions, upgrades or even recoding of the ebook files. The legacy titles that had no activity would be of little economic value to invest in. So, while it may be easier in the short run to maintain millions of ebook files on a server, in the long run, the challenges are very different than just building more shelves or another wing to the building.

Mark --- an excellent article. I appreciate the transparency from someone as innovative and successful as yourself.

I am writing to provide a little different perspective on a couple of your points.

#1 - regarding the "glut of high quality books" you said "Ten years ago, publishers artificially constrained book supply by publishing a limited number of new titles each year, and by agents and publishers rejecting nearly everything that came in through the slush pile. There was an artificial scarcity of books. The supply was further constrained by the inability of physical brick and mortar bookstores to stock every title. Even big box stores like Barnes & Noble and Borders could only stock a small fraction of the titles published by publishers each year, and as such they were forced to return slow-selling books to make room for new releases."

In the past, the model was established to generate sufficient revenue and profit for each title so as to build sustainable publishing companies and retailers and authors. There was relative economic balance and stability in the system - albeit an exclusive one. Due to the Creative Destruction of eBooks and e-Publishing platforms, there is now a glut of options in the marketplace. This has led to downward pressure on prices and author incomes. This is not sustainable. The natural economic response to this is for many people to give up on this as an income stream, leaving it to those who are willing to tough it out and hopefully consolidate the remains. Dare I say the period we are about to enter is one of disillusionment (for many)that follows any "gold rush" or fad.

#2 -- you said "Ebooks are immortal, so they never go out of print. Like cobwebs constructed of stainless steel, they will forever occupy the virtual shelves of ebook retailers, forever discoverable."

On one hand, this is not much different than a library filling its shelves with thousands of books no one checks out anymore. The unwanted books are not searched for or discovered -- they are just ignored. For this reason, it is actually more likely online retailers will NOT keep a never-ending list of backlist titles. Rather, it will make more sense for retailers to cull their offerings and drop the stuff that is not collecting any interest. Additionally, let's assume ebook platforms change a few more times and the technology requires conversions, upgrades or even recoding of the ebook files. The legacy titles that had no activity would be of little economic value to invest in. So, while it may be easier in the short run to maintain millions of ebook files on a server, in the long run, the challenges are very different than just building more shelves or another wing to the building.

My sales have gone down by half over at Amazon after KU hit. To be fair, my sales have taken a hit across other channels as well over this past year, which is probably due to the slowing down of the market. The sales are steadier on non-Amazon retailers, and the drop in sales isn't as sharp. However, since I do make more at Amazon, I feel the drop there the hardest. I'm not complaining. I'm just sharing what has happened to me this year because I've noticed other authors have noticed a similar situation, and it can help to know you're not alone.

I've been told (by some) that I'm stupid for not putting at least one book in KU. I have more than forty romances, so what's the risk? I have enough books to experiment with.

There's more to this business than making money, however. Yes, making money is nice. But it's only one part of the picture.

There's also the joy of writing what we want. There's a chance to change someone's life for the better, often without realizing it.

More than that, there's a human component to the whole thing.

It amazes me when I think of the friendships I've developed with some of my readers who have stayed with me since my early days back in 2009 and 2010. They've read everything I've written over the years, and because of their encouragement, I didn't quit when I felt like it (and I typically want to quit about twice a year). Because of them, I find the strength to keep going when times get tough. Some buy from Amazon, but not all of them do. I want to be sure I have my books available to them at retailers they want to buy them from.

Thanks for sharing your perspective, Ruth. Your commitment to readers has always shined through. I'd encourage readers to check out your great interview here at the Smashwords blog from a couple years ago.

Mark, while I agree with you that there are an increasing number of high-quality books being produced, the stigma against Indie authors is still being reinforced by the terrible drek that's being produced. At some point, Smashwords, Amazon, and other retailers/wholesalers are going to have to crack down on the quality of what is published.

I'm not talking about filtering out stories that no one wants to read. I'm talking about books with hundreds of misspellings, word misuse, tortured grammar, etc. Books that are practically unreadable. Much of that can be checked automatically, and spit back at the author the same way you do format checks now.

It's all fine and good to say the market will take care of it, but when the market decides to avoid Indie authors because the garbage causes too much stink around the entire enterprise, it's bad business for everyone.

The second thing is that publishing free books is hurting everyone. Smashwords, B&N and Amazon provide a free service for the give-it-away crowd and the rest of us pay for it. You spend as much to publish my books, that you take a cut from when they sell, as you do to send the freebies out in premium distribution. But the freebie author pays you nothing. In addition, the freebie conditions readers that the time and money and effort you and I spend on publishing my book is worth nothing.

The self-pub business model will change. If Amazon is successful in driving its competitors out of the ebook marketplace, that change will come harder and sooner than any of us wish, and probably not to our benefit.

Thanks Mark. I'm glad that I have entered the indie market in this phase of the cycle. Using your tips and comments of some the other writers, this will definitely be a learning phase for me and intend to make the best of this opportunity. I thank you for creating the Smashwords platform, it's practical and user friendly. Thanks.

I know this is an old post, but my hope is that you will at least get an alert of my new comment.

With regard to your observation that -

"It’s good your book is immortal, because it means you can look forward to harvesting an annuity stream of income for many years to come, especially for great fiction because fiction is timeless. But it means that every year there will be more and more books for readers to choose from. Unless the number of readers and the number of books read by readers grows faster than the number of titles released and ever-present, there will be fewer eyeballs split across more books. This means the average number of book sales for each new release will decline over time unless readership dramatically increases, or unless we see an accelerating pace of transition from print reading to screen reading."

-- Raymond Chandler made a similar observation in his essay the Simple Art of Murder about mystery novels that, "all of this immortality makes just a little too much competition." Chandler expands on the point in interesting ways.

What I don't see is any discussion about the enhanced ePub, MOBI, and Apple standards for fixed format e-books which allow images and sound in the book.Is Smashwords going to support and provide tools to produce such children's books, graphic novels, cook books, etc.?